Federal Reserve Proposes Limited Master Accounts For Crypto Firms

By: CryptoProwl America’s central bank is proposing to give cryptocurrency firms access to limited master accounts that are typically provided to traditional banks. The U.S. Federal Reserve would grant crypto companies access to special limited payment accounts that would be a lighter version of the master-account services given to banks. The central bank has opened a comment period on the proposed new accounts, which have long been pursued by cryptocurrency firms such as Coinbase Global (NASDAQ: $COIN ). Banks use master accounts to clear and settle payments and reduce their costs. Obtaining access to the Fed's payment rails has been a long-term goal of the crypto industry and its army of Washington, D.C. lobbyists. However, it’s not clear if the crypto sector will be pleased with the lighter version of the master accounts proposed by the Fed. The industry has called the proposal “skinny accounts.” Under the Federal Reserve’s proposal, crypto firms would not have access to intraday credit or the discount window, and would not earn interest on balances held at a reserve bank. Crypto companies would only have access to payment services with automated controls to prevent overdrafts from occurring. In March of this year, privately held Kraken became the first crypto bank to get a limited master account. However, Kraken’s access was granted by the Federal Reserve Bank of Kansas City and is not under federal jurisdiction. Bitcoin (CRYPTO: $BTC ) is currently trading at $77,200 U.S.